Bespoke services can beat the cost of compliance, says Helvetic

Hedge funds are starting to feel the burden associated with increased industry regulation, particularly small funds which are being forced to shut-up-shop in light of the costs needed to adhere to regulatory compliance, according to Paula Smith, head of asset management at PwC in the UK.

Nicola Smith, chief executive of Helvetic, believes that while regulatory compliance is unavoidable there are ways service providers can work with fund managers in order to reduce the cost burden, through bespoke services designed to meet the needs of the individual.

"This has always been one of the major concerns regarding regulation, particularly the impact of increased costs for smaller funds. Larger funds are more adept at handling the changes and associated costs that regulatory compliance brings, but what about everyone else?’ says Smith. “Fortunately, service providers are recognising the difficulties associated with increased regulation and are working with managers to offer niche services designed to fit smaller funds, that will not break the bank.

"When it is not possible to afford your own compliance officer smaller fund managers could look to their administrator to see if they can provide some of the back office support to reduce the costs and allow the manager to focus on what they are good at.

"Generally the manager should look to find service providers who are looking to help them find solutions rather than just offering an off the shelf product that does not vary with each client’s needs. In larger organisations these services usually come at a very high premium and are only on offer to very large funds but in smaller organisations the emphasis is very much on a tailor made product and a high level of service.

"It is this process that allows the fund manager to pick the service which best suits them, in order to meet regulatory needs without breaking the bank."